In the US you're allowed to deduct hobby expenses up to (but not exceeding) income from that hobby as part of your miscellaneous deductions. But I can't find a definitive source on the corresponding rule for Canada.

I know that Canada has the same "expectation of profit" test as the US with regards to allowable net losses (to reduce regular income), but does Canada have the same rule for all expenses as well — that is, if you have expenses from a hobby with no expectation of profit, would you still owe personal taxes on all income from that hobby without the chance to deduct anything?

If that were the case, a hobbyist would need to gross up their prices or funding goals by 25-50% to cover taxes for all expenses in order to break even compared to an actual business — it doesn't seem fair, so I'd like to know what the law actually says in this regard.